Asked by Mario Alberto on Jun 30, 2024
Verified
What is the most likely effect of the development of XBOX with DVD capabilities on the DVD player industry?
A) Increased price elasticity of demand for the DVD player industry because XBOX are complements
B) decreased price elasticity of demand for the DVD player industry because XBOX are complements
C) Increased price elasticity of demand for the DVD player industry because XBOX are substitutes
D) decreased price elasticity of demand for the DVD player industry because XBOX are substitutes
Price Elasticity
A gauge of the degree to which the amount of a product desired changes in response to a price adjustment.
DVD Capabilities
The functional features or technologies that enable a DVD player or drive to read, write, or rewrite discs.
DVD Player Industry
The sector or market associated with the manufacture and sale of DVD players.
- Understand the concepts of price elasticity of demand and supply.
- Analyze the impact of complementary and substitute goods on market demand.
Verified Answer
MS
Magdy SalehJul 03, 2024
Final Answer :
C
Explanation :
The development of XBOX with DVD capabilities creates more substitutes for DVD players, causing consumers to have more options to choose from. This increase in substitutes will lead to an increase in price elasticity of demand for the DVD player industry, as consumers can easily switch to alternative products.
Learning Objectives
- Understand the concepts of price elasticity of demand and supply.
- Analyze the impact of complementary and substitute goods on market demand.
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